From the President and CEO

Blog | June 8, 2018


By Adam Zolotor

Welcome to the new NCIOM blog! Beginning today, we will be publishing blog posts at least weekly. We will be providing updates on current and future work, information and analysis on hot health policy topics, and summaries of recent articles in the NCMJ. As a non-partisan health policy institute, the NCIOM seeks to improve the health of North Carolinians. We will only take positions on this blog that we have previously vetted and studied in depth, using task forces to arrive at evidence-informed and consensus-based policy solutions.


Today we’ll talk about Medicaid.


The topic most in the news in NC Medicaid is around transformation. We’ll save that for another post. Today I want to update readers on Medicaid expansion. The NCIOM Task Force (full report) that examined the Affordable Care Act (ACA) recommended that NC adopt Medicaid expansion for adults up to an income of 138% of the Federal Poverty Level. Under the ACA, the federal government covered 100% of the cost of those newly eligible initially, decreasing to 90% by 2021. Expansion would provide insurance to about 500,000 North Carolinians, bring about $2 billion federal dollars into NC, and create between 25,000 and 43,000 jobs.


That is old news. The new news is that Medicaid expansion has become the new normal in the United States. With the Virginia House of Delegates vote on May 31 to expand Medicaid and Maine’s passage of expansion through a ballot initiative in December, they became the 33rd and 34th states to do so. (Note that Maine’s governor has failed to meet the required submission of a state plan amendment and is out of compliance with state law). Virginia is the fifth southeastern state to expand Medicaid (joining Louisiana, Arkansas, Kentucky, and West Virginia). Currently Idaho, Utah, and Nebraska are considering Medicaid expansion (ballot initiatives in November). As of early 2017, we estimated that NC taxpayer's’ share of paying for Medicaid expansion in other states via federal income tax totaled about $1 billion. This cost will grow every time a new state chooses to expand Medicaid (NCMJ).


Why not expand Medicaid? Most opponents of Medicaid expansion in NC warn that with declining federal contribution, the state cost of Medicaid expansion would have substantial budget impacts. Recently proposed legislation would have state hospitals and other health institutions cover the state share of the cost. Some opponents of Medicaid expansion also fear that the federal government might “renege” either on the ACA as a whole or on the enhanced federal match for the expansion population.


In 2017, two bills were proposed by NC lawmakers to insure more low income North Carolinians: SB 290 sponsored by Senators Clark and Bryant and HB 662 introduced by Representatives Lambeth, Murphy, Dobson, and White (issue brief). Both bills would have used hospital assessments to help fund the state’s share of cost. The HB also includes a work requirement with exemptions based on age, ability, and need to care for a disabled adult or a young child.


The ACA is still the law in the US. States continue to choose to expand Medicaid, including those in the southeastern US. Medicaid expansion brings significant federal dollars and accompanying jobs to states that choose to accept those resources, a study by the Urban Institute found for every state dollar invested in Medicaid Expansion, states received $13.41 in federal funds. In addition, five percent of North Carolinians would gain health insurance under Medicaid expansion. The cost of Medicaid expansion in 2021 would be real, but small in comparison to the federal investment, and would be offset by taxes, health institution contributions under some legislative scenarios, and savings in other programs. As the number of states choosing to accept Medicaid expansion increases, so does the cost in federal tax dollars to North Carolinians.